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Introduction

Australia’s nine governments signed three agreements establishing the National Competition Policy (NCP) on 11 April 1995. These agreements are: • • • the Competition Principles Agreement (CPA); the Conduct Code Agreement; and the Agreement to Implement the National Competition Policy and Related Reforms.

The agreements are reproduced in the National Competition Council publication, Compendium of National Competition Policy Agreements - Second Edition (June 1998), and are accessible on the Council’s website: http://www.ncc.gov.au. Under clause 5 of the Competition Principles Agreement (CPA),1 governments undertook to conduct a program for the review, and where appropriate, reform of legislation that restricts competition. The CPA originally set 2000 as the deadline for governments to complete their programs. The Council of Australian Governments (CoAG) extended this timeframe on 3 November 2000 and the target date is now 30 June 2002 (CoAG 2000). Satisfactory implementation of reform may include, where justified by a public interest assessment, having a firm transitional arrangement that may extend beyond 30 June 2002.2 The principles guiding legislation review and reform are outlined in Clause 5 of the CPA. Governments agree that legislation should not restrict competition unless they can show that: • • the benefits of the restriction to the community as a whole outweigh the costs; and the objectives of the legislation can only be achieved by restricting competition.

New legislation that restricts competition must also be shown to meet these guiding principles. All States and Territories have legislation gatekeeping processes to assess new legislation against the CPA principles.

1 2

The full text of clause 5 is reproduced in appendix A. See appendix B, which reproduces relevant material from the communique of the CoAG meeting of 3 November 2000.

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Legislation Review Compendium

Each government established a timetable for reviewing its restrictive legislation over the period June 1996 to June 2002 and each reports annually on its progress. Review timetables and annual reports are available from respective State and Territory competition policy officials. Contact details for State and Territory competition policy officials are provided in appendix C.

The legislation review compendium
The compendium provides summary government current to September 2001.3 • • • • • Name of legislation Agency — the department, authority or Minister responsible for the legislation Major restrictions — the nature of the restriction(s) on competition Review activity — the nature and status of review activity Reform activity — a summary of the reforms implemented following the review information, provided by each

The compendium reports governments’ legislation review and reform activity relating to the NCP water reform program in chapter 11. The compendium is a guide to review programs and their progress, and does not replace the legislation review timetables or annual reports produced by each government.

What is legislation that restricts competition?
While there is almost no regulatory activity that is neutral in its implications for competition, the types of regulation which impact on competition most directly are those which restrict entry to markets and those which restrict competitive conduct by participants in markets (Hilmer, Rayner and Taperell 1993, p. 191).

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The agency information for the Northern Territory has been updated to reflect the machinery of government changes made by the new government elected in 2001.

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1 Introduction

Legislation affecting competition may directly or indirectly: • • • • • • • govern the entry and exit of firms or individuals into or out of markets; control prices or production levels; restrict the quality, level or location of goods and services available; restrict advertising and promotional activities; restrict price or type of inputs used in the production process; be likely to confer significant costs on businesses; or provide advantages to some firms over others by, for example, sheltering some activities from the pressures of competition.

Legislation is defined broadly in the CPA to include Acts, enactments, Ordinances or regulations.

The terms of reference for reviews
The CPA provides guidance on the matters that should be taken into account in undertaking a review of anticompetitive legislation. Without limiting the terms of reference, a review should: • • • • • clarify the objectives of the legislation; identify the nature of the restriction on competition; analyse the likely effect of the restriction on competition and on the economy generally; assess and balance the costs and benefits of the restriction; and consider alternative means of achieving the same result including nonlegislative approaches.4

National reviews
In some cases, particular legislation will have a national dimension or effect on competition (or both), and a national rather than a State based review may

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See CPA subclause 5(9). Clause 5 is reproduced in appendix A of this compendium.

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Legislation Review Compendium

be appropriate. National reviews of similar legislation may be proposed where some or all jurisdictions agree on terms of reference. The CoAG Committee on Regulatory Reform facilitates identification of possible national reviews and agreement by jurisdictions on review arrangements.

Water industry legislation
Chapter 11 reports on progress by State and Territory governments in reviewing and reforming legislation relating to the water industry. The chapter reports on both the work undertaken by governments as a result of the Competition Principles Agreement legislation review and reform obligation and on actions by governments to address the water reform obligations set by the Council of Australian Governments. The information in the chapter is current to September 2001.

Using the compendium
For each jurisdiction, the compendium reports the legislation being reviewed alphabetically. The government agencies responsible for administering the legislation are listed in the tables in abbreviated form, with a key to the abbreviations included in the introduction to each jurisdiction’s chapter. For information about specific reviews, users should contact the relevant jurisdiction’s competition policy unit. Contact details are provided in appendix C of this compendium. If you have questions about competition policy and legislation review you are welcome to contact the National Competition Council Secretariat located in Melbourne. The telephone number of the Secretariat is (03) 9285 7474.

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